Lakeland Financial Corp. Reports Operating Results (10-K)

Lakeland Financial Corp. has a market cap of $359.34 million; its shares were traded at around $22.35 with a P/E ratio of 16.93 and P/S ratio of 2.48. The dividend yield of Lakeland Financial Corp. stocks is 2.77%. Lakeland Financial Corp. had an annual average earning growth of 2.5% over the past 10 years.

Highlight of Business Operations:

The Company is an Indiana institution serving Indiana clients. Since 1990, the Company has expanded from 17 offices in four Indiana counties to 43 branches in twelve Indiana counties and one loan production office in Indianapolis. During this period, the Company has grown assets from $286 million to $2.7 billion today, an increase of 838%. Mergers and acquisitions have not played a substantive role in this growth as the Company s expansion strategy has been driven primarily by organic growth. Since the decision to expand outside of the four-county home market in 1990, the Company has targeted growth in larger cities located in the Northern Indiana market. In 1990, the Company began an expansion strategy that the Company believes has created a well-established presence in the region directly north of the Company s home market. This expansion was focused on the cities of Elkhart, South Bend and Goshen. In 1999, the Company expanded to the east and opened the first office in the Fort Wayne market. Most recently in 2006, the Company established a loan production office in Indianapolis and anticipates opening a full service office there in 2011.

The Bank competes with other local and regional banks in addition to major banks for large commercial deposit and loan accounts. At December 31, 2010, the Bank was subject to an aggregate maximum loan limit to any single account pursuant to Indiana law of $46.7 million. The Bank currently enforces an internal maximum loan limit of $20.0 million, which is less than the amount permitted by law. This maximum might occasionally limit the Bank from providing loans to those businesses or personal accounts whose aggregate borrowing needs exceed this amount. In the event this were to occur, the Bank maintains relationships with other financial institutions. The Bank may participate with other banks in the placement of large borrowings in excess of its lending limit, although the Bank typically does not participate in such arrangements. The Bank is also a member of the Federal Home Loan Bank of Indianapolis in order to provide additional funding, as necessary, to support funding requests and to broaden its mortgage lending and investment activities

Required capital levels. As indicated above, the Dodd-Frank Act mandates the Federal Reserve to establish minimum capital levels for bank holding companies that are as stringent as those required for insured depository institutions. The components of Tier 1 capital will be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. As a result, the proceeds of trust preferred securities will be excluded from Tier 1 capital unless such securities were issued prior to May 19, 2010 by bank holding companies with less than $15 billion of assets. As the Company has assets of less than $15 billion, it will be able to maintain its trust preferred proceeds as capital but it will have to comply with new capital mandates in other respects, and it will not be able to raise Tier 1 capital in the future through the issuance of trust preferred securities.

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